U.S. company to pay $13 million to settle alleged ITAR export violations

Alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR)

Alleged violations of the AECA and the International Traffic in Arms Regulations (ITAR)

The U.S. State Department concluded an administrative settlement with a North Carolina company to resolve alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).

According to the State Department release, there were unauthorized exports and re-transfers of ITAR-controlled technical data that contained engineering prints showing dimensions, geometries, and layouts for manufacturing castings and finished parts for multiple aircraft, gas turbine engines, and military electronics to and/or within Canada, Ireland, Mexico, China, and Taiwan.

Under the terms of the 36-month consent agreement, the company will pay a civil penalty of $13 million—of which the State Department agreed to suspend $5 million on the condition that the funds will be used for Department-approved consent agreement remedial compliance measures to strengthen the company’s compliance program. In addition, for an initial period of at least 18 months, an external special compliance officer will be engaged by the company to oversee the consent agreement, which will also require one external audit of the company’s compliance program during the agreement term as well as implement additional compliance measures. 

The State Department found that the company had:

  • Voluntarily disclosed the alleged violations
  • Acknowledged the serious nature of the alleged violations
  • Cooperated with the State Department’s review
  • Instituted a number of compliance program improvements

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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